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2022 (9) TMI 1463 - ITAT HYDERABADTP Adjustment - Comparable selection - HELD THAT:- KPL International Limited - There need not be any confusion between the dissimilarity of functions and dissimilarity of products. Function of both the assessee and the KPL is similar, namely, distribution of products. Even to the extent of 97.5% such products are also similar. Then, unless and until it is established by the assessee that a grave prejudice would be caused by comparing this company with the assessee or that the 2.5% revenue derived by KPL by the sale of other products, it is not fair for the assessee to seek the view taken in Intoto Software (supra), to be extended to the case of the assessee and KPL where both the companies are broadly in the sale of similar products and the additional product only secures 2.5% of the revenue. According to us, the view taken in Intoto Software (supra) has no application to the facts of this case. We accordingly uphold the findings of AO/ TPO and learned DRP in this regard and confirm the KPL as a comparable with the assessee. Hitech Specialities Solutions Limited is deriving income not only from the sale of traded/finished goods but also derives about 10% of revenue from the services like management fee and commission. The segmental information of the annual report reads that the entire revenue is from only one segment, without any detailed figures as to the profitability of the sale of product and sale of service. In these circumstances, we are of the considered opinion that it is unsafe to consider this entity as a comparable to the assessee. We, therefore, direct the AO/TPO to exclude this entity from the final list of comparables. Hindage Oilfield Services Limited - Both the entities [Assessee and Hindage] are engaged in the sale of traded products. There is slight variation in the description of the products. TNMM will take care of the variations. For this reason, we decline to interfere with the findings of both the authorities in respect of inclusion of Hindage Oilfield Services Limited as a comparable. Adjustment towards Interest on receivable - HELD THAT:- We are of the considered opinion that the ends of justice would be met by accepting the interest rate on similar foreign currency receivables/advances as LIBOR+200 points. We direct the learned Assessing Officer / learned TPO to adopt the same
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